Maryland PSC Renewable Portfolio Standard

1. Maryland PSCRenewable Portfolio Standard Kevin Mosier 410-767-8926 kmosier@psc.state.md.us Michael Lee, Director mlee@psc.state.md.us Integrated Resource Planning Division Maryland Public Service Commission http://www.psc.state.md.us

2. Presentation Outline • RPS Overview • Supplier Obligations • Statistics from the MD RPS Program

3. Establishment of RPS Program • 2004 General Assembly Session • Legislation: Electricity Regulation - Renewable Energy Portfolio Standard and Credit Trading - Maryland Renewable Energy Fund • Public Utility Companies Article: Subtitle 7. Renewable Energy Portfolio Standard • RPS continues to be modified through Legislative changes • (e.g., new solar tier, ACP doubled; geographic scope reduced)

4. RPS Overview • Requires certain standards to be met by the accumulation of renewable energy credits • Requires electricity suppliers to submit a report each year to the Commission • Requires electricity suppliers to pay compliance fees if the RPS standards are not met • Establishes a Maryland Strategic Energy Investment Program to be administered by the Maryland Energy Administration subject to recommendations from the Strategic Energy Investment Advisory Board • Requires the Commission to establish and maintain a renewable electricity trading system that includes registration of renewable energy facilities: Maryland uses GATS

5. Tier 1 Renewable Sources • Solar (Tier 1 Solar) • Wind • Qualifying biomass • Methane from the anaerobic decomposition of organic materials in a landfill or wastewater treatment plant • Geothermal • Ocean • A fuel cell that produces electricity from a Tier 1 renewable source • A small hydroelectric power plant of less than 30 megawatts in capacity that is licensed or exempt from licensing by the FERC • Poultry litter-to-energy

6. Tier 2 Renewable Sources • Hydroelectric power other than pump storage generation • Waste-to-energy

7. REC Prices • Prices of non-solar RECs vary, but typically range between $0.25 and $2 • Prices for solar RECs are much higher

8. Supplier Obligations • Meet RPS Standards; or • Make Alternative Compliance Payments; & • File RPS Annual Supplier Report

9. RPS Requirement Changes • Tier 1 is 2% in 2009 and increases to 18% in 2022 and on • Tier 1 solar is 0.010% in 2009 and increases to 2% in 2022 and on • Tier 2 is 2.5% and the Tier 2 requirement ends in 2019

10. Annual RPS Requirements

11. Compliance Fee • Companies that do not meet the RPS requirement must pay a compliance fee • The fees vary by year and type • Tier I: $20 per MWh in 2008 to 2010; $40 thereafter • Tier I Solar: falls from $450 in 2008 to $50 per MWh in 2023 • Tier 2: $15 per MWh throughout • Tier 1 for Industrial Process Load: falls from $8 per MWh in 2008 to $2 per MWh in 2017 and thereafter

12. Annual Compliance Fees

13. 2008 Compliance Fees • Of $1,005,495 in compliance fees owed in 2008, 98 percent was from solar requirements • The majority of the companies met their non-solar Tier 1 and Tier 2 requirements by submitting RECs • Almost all companies paid some amount of compliance fees

14. RPS Annual Supplier Reports • Required from all licensed utilities, suppliers, and brokers • Due by April 1 each year • Both brokers and supplier without sales must still file • Must provide the total price of all Tier 1, Tier 1 Solar, and Tier 2 RECs

15. Step-by-Step Instructions for Accessing Supplier Reports • Commission’s home page is located at: www.psc.state.md.us • The “Resources” column at the home page contains a “Renewable Portfolio Standard Documents” link which contains several documents pertaining to the MD RPS Program

16. RPS Website • Applications: • Certification as a Renewable Energy Facility (non-solar) • Solar Renewable Energy Facility application • Waiver of Compliance Fee Accessible: http://webapp.psc.state.md.us/intranet/electricinfo/home_new.cfm

17. RPS Website (cont’d) • Help and Direction: • RPS statute and regulations • Frequently asked questions • Filing instructions • Maryland PSC Reports: • Compliance Fee Remittance Report • Marketed Renewable Electricity Sales Report • On-Site and Behind-the-Meter Generation Report • Yearly RPS Supplier Annual Report

18. Purpose of Supplier Reports • Reporting • Auditing • Analysis

19. Non-Compliance Letter • Issued June 10, 2009 • Directs suppliers that have not submitted the annual RPS report to respond and show cause as to why the Commission should not: • Suspend or revoke Maryland license • Assess civil penalty

20. RPS Results to Date • Number of RECs Retired • Year 2006: 1,875,943 • Year 2007: 1,936,248 • Year 2008: 2,683,619 • Compliance Fees Paid • Year 2006: $38,209 • Year 2007: $36,374 • Year 2008: $1,005,495* *Some companies have yet to submit all outstanding payments.

21. REC State of Origin2008 Maryland Compliance RECs by Facility Location

22. Tier 1 RECs Retired in Maryland by Fuel Type (2008)

23. Tier 2 RECs Retired in Maryland by Fuel Type (2008)

24. Supplier Obligation Review • Meet RPS Standards; or • Make Alternative Compliance Payments; & • File RPS Annual Supplier Report

25. QUESTIONS AND COMMENTS Kevin Mosier 410-767-8926 kmosier@psc.state.md.us Michael Lee, Director mlee@psc.state.md.us Integrated Resource Planning Division Maryland Public Service Commission